stock market news, analysis & forecasts from Holly Hooper-Fournier

Neighbors

It felt good to exhale Friday evening after the capture of Dzhokhar Tsarnaev, one of the Boston Marathon bombers. However, news late yesterday that the Royal Canadian Mounted Police thwarted an Al Qaida-linked terror attack on a New York City train bound for Montreal once again unnerved me. I live just 45 minutes from the Canadian border; Montreal is a two-hour drive – that close proximity makes me feel more connected to Canada than the average American. Still, I’m embarrassed to admit that I couldn’t tell you on any given day how their stock market is faring.

We’re all familiar with the S&P 500 Index. In Canada, the major stock market benchmark that financial advisers refer to several times a day is the S&P/TSX Composite Index. Whereas the S&P 500 is comprised of 500 large-cap companies, oddly, the number of companies in the S&P/TSX can vary widely from year to year. Currently 237 companies make up the S&P/TSX.

So far in 2013 while the S&P 500 is enjoying gains approaching 10%, the S&P/TSX has come under selling pressure thanks to the rout in commodity prices – the crash in the value of gold bullion, in particular. The Canadian benchmark is dominated by commodity stocks due to the country’s concentration of natural resources. In fact, resource companies make up 40% of the weight of the main stock index. Barrick Gold, the world’s largest gold producer, is a top ten holding of the S&P/TSX. The iShares MSCI Canada Index (EWC) is currently sitting at a level last seen in August after having lost 5.9% year-to-date. My strategy for managing risk triggered a sell signal for EWC in mid-February. EWC is trading below both its 50 day and 200 day exponential moving averages and momentum continues to weaken.

And what about our neighbor to the south, Mexico? Mexico also has heavy exposure to commodities, yet the Índice de Precios y Cotizaciones (IPC) – Mexico’s main stock index – is still above water in 2013. Mexico’s Bolsa is benefiting from a push for economic reforms introduced by a newly-elected president and that’s attracting investment dollars. For exposure to the Mexican market you can check out iShares MSCI Mexico Capped Invstbl Mkt (EWW).

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The opinions expressed on this site are those solely of Holly Hooper-Fournier and do not necessarily represent those of Mutual Fund Strategist, Ltd ("MFS"). Ms. Hooper-Fournier is an Investment Adviser Representative of MFS, an investment adviser registered with the States of California and Vermont. This website is for informational purposes only and does not constitute a recommendation to buy any funds, ETFs or stocks, nor is it a complete description of the investment services or performance of MFS. Nothing on this website should be interpreted to state or imply that past results are an indication of future performance. A copy of MFS's Form ADV Part 2a/b is available upon request. This website is in no way a solicitation or an offer to sell securities or investment advisory services. Ms. Hooper-Fournier and MFS disclaim responsibility for updating information. In addition, Ms. Hooper-Fournier disclaim responsibility for third-party content, including information accessed through hyperlinks.